KUALA LUMPUR (Jan 19): Guinness Anchor Bhd (GAB) wants its RM56.3 million tax dispute with the Royal Malaysian Customs to be resolved in a fair manner.

"We have regular dialogue with Customs over the issue since last year," GAB finance director Atul Chhaparwal told a news conference to announce the group's results for the six months ended Dec 31, 2015 today.

In August last year, GAB had received bills of demand from Customs, demanding payment for additional excise duties and sales tax worth RM56.3 million in total. The payments claimed by Customs were RM34.17 million in excise duties from Aug 28, 2012 to Oct 31, 2013; and sales tax amounting to RM22.16 million from July 1, 2012 to Oct 31, 2013.

"There is continued dialogue to ensure (Customs) see it from our point of view that it (the RM56.3 million excess duties and sales tax) is completely unjustifiable," Chhaparwal said, adding that there is no material development thus far.

"We still believe we have a strong case and there is no threat to the group (in terms of financial performance)," he added.

GAB managing director Hans Essaadi said the group does not mind to pay taxes to the government but it has to be fair.

"It is clear from our profit and loss statement that the amount of taxes GAB pays [is] relatively large.

"We don't mind to pay tax, but it must be a fair treatment," he stressed.

In an announcement with Bursa Malaysia last year, GAB had said the retrospective claims, which it deemed "unjustifiable", came about as the Customs Department had imposed a new method of valuation for excise duty, which came into effect on Nov 1, 2013.

The group added that it had paid all excise duties and sales tax for the period, based on valuations previously assessed and approved by the Customs Department.

On a separate matter, Essaadi said GAB's operating expenditure (opex) is expected to grow higher than usual in the next few quarters due to weaker ringgit.

GAB registered an opex of RM406.7 million in the three months through Dec 31, 2015.

"Yes, there will be some increase, but I was unable to disclose the quantum.

"But it will be partially offset by our cost optimisation programme," he added.

GAB posted a 19.3% jump in net profit for the three months ended Dec 31, 2015 to RM90.84 million or 30.07 sen per share versus RM76.12 million or 25.2 sen per share a year ago, underpinned by higher sales, improved cost efficiency, phasing of certain brand advertisement and promotion investments.

Revenue rose by a marginal 0.7% to RM524.55 million from RM520.77 million a year ago.

For the cumulative six months, its net profit rose 17.7% to RM153.94 million or 50.96 sen per share from RM130.71 million or 43.27 sen per share last year.

It also declared a total dividend of 50 sen, comprising 20 sen and 30 sen special dividend, payable on April 15.

GAB expects the external environment to continue to be challenging, but remains optimistic that it could post a satisfactory result for the financial year ending Dec 31, 2016 (FY16).

"We will continue to create value through business simplification and clear priority," Essaadi said, which includes increasing operational efficiency and enhance competencies and capability of distributor.

GAB's shares has been trading on the decline since Dec 1, 2015, which saw its shares price fall to a low of RM12.96 last Thursday (Jan 14) from its one-month high of RM14.13 then.

GAB shares ended 10 sen or 0.77% higher at RM13.08 today, for a market capitalisation of RM3.95 billion. The current price is trading up 11.8% to analysts' consensus target price of RM14.83.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)